Carry-forward contributions

Carry-forward contributions are not a new type of contribution, they are simply new rules that allow super fund members to use any of their unused concessional contributions limit (or cap) on a rolling basis for five years.

This means if you don’t use the full amount of your concessional contribution cap ($25,000 in both 2018/2019 and 2019/2020), you can carry-forward the unused amount and take advantage of it up to five years later.

Any amount not used after five years expires and these carry-forward rules only relate to concessional contributions into super (not non-concessional contributions, as they have different caps).

To take advantage of the carry-forward contribution rules, your Total Super Balance (TSB) must be under $500,000.

Your TSB is calculated by adding together all the amounts you have in the accumulation phase of super, plus the retirement phase value of your super and any rollovers in transit between super funds at 30 June.

These provisions can be a great way to boost your retirement savings if you have taken time off work or have higher disposable income than in previous years.  It may also be a great way to offset a capital gain if you sell down an investment and haven’t utilised your contribution cap in previous years.

As always, super caps can be tricky, so make sure you speak to your adviser to check eligibility and whether this strategy may be suitable for you.

Mulcahy & Co Financial Planning are locally based but work within their national office structure. This allows us to have many experts in many areas of business to ensure your financial affairs are in order and efficient.

We offer services from Accounting to Marketing and everywhere in between so individuals and businesses can benefit. See our list of services at https://www.mulcahy.com.au/services/

Lynde Adams
Mulcahy & Co Financial Planning, Mildura.